MARKET REPORT: Booking success at Thomas Cook

It will happen again this year. On Boxing Day after you’ve just scoffed another plate of cold turkey and pickle and made short work of a bottle of Sancerre or Fleurie, you will switch on the TV and advertisements will persistently sing the praises of a holiday in the Mediterranean or Barbados.

After spending an arm and a leg on Christmas, the last thing you really want to think about is forking out £2,000-plus on a holiday in July or August. Or do you?

The UK is currently shivering as Siberian-type winds cut across the country and according to forecasts, Britain faces its worst winter for 20 years. If so, Joe and June Public will be rushing to book a holiday in the sun before 2013 is a matter of weeks old.

Thomas Cook, the 171 year-old travel firm, hopes so. It nearly went bust in 2011 after families cut back on holidays. It secured its future in May of this year when a £1.4bn debt refinancing deal extended its financing by two years to May 2015.

Its shares have soared 60 per cent over the past fortnight and closed yesterday a further 4p up at a 52-week peak of 36p. Directors last month waded in for almost 1m shares around the 23.5p level and that bolstered confidence and suggested that a strong recovery was on the way.

Chief executive Harriet Green, who joined in July, bought 500,000 shares at 23p. She recently reported a strong finish to the fourth quarter and said: ‘Thomas Cook is viable and working. It has turned the corner.’

Morgan Stanley yesterday upgraded to overweight from equalweight.

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Better-than-expected US non-farm payroll (employment) figures showing 146,000 jobs were added to the US economy in November and that the unemployment rate fell to 7.7 per cent, from 7.9 per cent, to its lowest level in almost four years, gave markets on both sides of the Pond an end-week lift.

Wall Street was up more than 40 points and that helped the Footsie climb to 5,923 before it closed 12.98 points higher at 5,914.4. Many fund managers are still keeping their powder dry until President Obama and the Republicans can successfully conclude fiscal cliff negotiations.

As its catalogue chain Argos benefits from the demise of Comet, Home Retail put on 5p more to 130p. Buying in anticipation of pleasing interims on Wednesday helped Superdry fashion company Supergroup climb 15.5p to 617p. Panmure Gordon forecasts a 16.2 per cent rise in pre-tax profits to £15.1m and no dividend. Chief executive Matthew Williams’s sale of 40,000 shares at 49.5p dragged Topps Tiles a penny lower to 49p.

Pace rose 2.3p to 191.8p amid speculation it could be interested in buying Motorola’s set-top box business, put up for sale by Google.

Trade exhibition group ITE rose 10.8p to 225p after Goldman Sachs lifted its target price to 325p from 315p. Earlier this week it reported slightly above forecast full-year results and the acquisition of a 28.3 per cent stake in Asian Business Exhibitions & Conferences from Qatar’s QInvest for £14m cash, which strengthens its position in the Indian market.

Profit-taking in the wake of the recent stonking gain which followed the £1bn-plus sale of its rail business to Germany’s Siemens left Invensys 5.2p down at 322.8p.

Transport company FirstGroup edged 0.9p forward to 188p after being granted an extension to the Scotrail franchise. Scheduled to end on 9th November 2014 it will now cease at the end of March 2015. This is to apparently ensure a consistence service during a period when Scotland will be hosting the Commonwealth games and the Ryder Cup.

Wolf Minerals advanced 1.62p to 15.38p after securing a £51m funding package for its tungsten and tin project in Devon. Belgravium Technologies shed 0.62p to 4.38p after the supplier of mobile data to a variety of industrial sectors warned that because of contract delays profits for the full year are likely to be below market expectations.

Aurum Mining firmed 0.12p to 3.12p after a placing of 23m shares at 3p a pop. Existing shareholders and new investors helped raise £693,960, which will be used to embark on aggressive exploration programmes at each of its gold and tungsten projects.

Cameroon-focused Afferro Mining touched 78.25 before closing 0.12p cheaper at 75.75p after confirming it is in talks with several parties that could result in a strategic investment. Speculation has suggested that its management has been in talks with India’s Jindal Steel and Power.

Broker Killik is bullish about the water sector which it says provides dividend growth and attractive yields in a low interest rate environment.

It recommends United Utilities, 0.5p easier at 689.5p, which offers the purest play having largely exited its non-regulated businesses. Based on expected dividend growth of 7.2 per cent this year, the shares trade on a prospective dividend yield of 5 per cent.